* Authority says fracking and water safety can be reconciled
* Revises shale gas potential, newly estimates shale oil
* Legal uncertainty continues, opposition runs high
By Vera Eckert
FRANKFURT, Jan 26 Tapping Germany's shale gas and oil without damaging drinking water is possible, said the author of a federal study on Tuesday, although the size of reserves is slightly smaller than previously estimated.
German lawmakers are debating whether to use the hydraulic fracturing (fracking) technique to extract unconventional mineral resources, with many worrying it could damage Germany's environment.
Fracking involves pumping water and chemicals at high pressure through drill holes to prise open shale rocks holding gas and oil, a process used in the United States.
Conventional resources reside in more porous and permeable rock, allowing easier access.
Geologists at the Federal Institute for Geosciences and Natural Resources (BGR) used computer simulations to study what would happen to frack fluids when injected into the bedrock of the North German basin.
"We found that the injected fluids did not move upwards into layers carrying drinking-water," said Stefan Ladage, lead author of the BGR study, which was published in Germany last week.
Germany's powerful green lobbies warn against the possible contamination of drinking water through fracking.
The densely populated country is committed to moving to renewable energy. Proponents say that eliminates the need to look beyond existing oil and gas reserves.
But energy companies like ExxonMobil, Basf , Dea and CEP want to develop Germany's shale resources, arguing this could reduce its dependence on imported energy.
The BGR said that between 0.32 trillion and 2.03 trillion cubic metres (cbm) of gas could be extracted in depths below 1,000 metres in northern Germany.
This is slightly less than between 0.7 trillion and 2.3 trillion cbm estimated by BGR in 2012, but outweighs the 0.11 trillion cbm of conventionally available gas.
"Gas production from domestic resources has been falling for 10 years," Ladage said. "Using shale gas resources in Germany primarily bears the potential of mitigating part of the ongoing decline."
The process would take decades as it was in its very early stages, he said.
BGR for the first time also estimated Germany's shale oil resources, at a relatively small 13 to 164 million tonnes. It has 31 million tonnes of conventional oil reserves.
But federal environment Minister Barbara Hendricks said last week she did not see much scope for fracking.
"I don't think it will be economically rewarding," she told a conference. (Reporting by Vera Eckert, additional reporting by Caroline Copley; Editing by Katharine Houreld)